the part of the northern european countries to tie the great german giants down with as many bureaucratic ropes as they possibly could they have done it to this point i think it is an eminently unsuccessful attempt i cannot imagine that that germans working as hard as they do as many hours as they do saving as much money as they do find anything. of equal nature with the greeks who simply don't work as hard as they do don't save as much as they do and avoid taxes like they do so quite honestly i think at the core at the edges of this cloth the thread is being ripped and that cloth is finally coming apart jim singapore. is going to go to you anyway go ahead peter. peter the concept of a unified european currency is fabulous and the world needs something to replace or to compete with the u.s. dollar unfortunately execution has not been very good they brought in people like greece and and portugal and ireland who weren't paying there aren't paying their bills and who weren't paying their bills and that's led to the problem i'm like

dennis i cannot conceive of why honest hard working australians and dutch and fans should have to pay for a bunch of greeks are sitting on the beach drinking whoso and greek banks up and this is outrageous because if i go to you in washington ok we have two euro skeptics are you going to bounce around a little bit. i'll try to the bottom line is this this this is a good project to begin with if the membership had been correct greece portugal ireland spain were never supposed to join and if it was a reasonable six countries bedded down we would have had a pretty successful project but in the you know we've got. in the eurozone at this point this is not healthy and i agree with them that this situation is now but it's done it's legalized and no one can step out and no other people can you know sort of change the rules at this point so the germans have to pay the piper they will in

this document and this is the repercussions i don't know. how they want to do it and. they've been. saying for the germans the germans don't the germans don't have to pay the piper let greece go bankrupt it would be good for greece it would be good for the europe it'd be good for the world if greece went bankrupt and rose to see how to pay their bills or stop lying then you would have everybody would know it's a strong sound currency based on a strong sound economy while while i'm out and go bankrupt let's listen in our euro in america we've had staged cities go bankrupt we've had carriers go bankrupt it didn't in the united states and it didn't in the u.s. dollar ok. i'll tell you why because of the four hundred billion dollars of debt that greece has fifty percent is held by german and french banks and those countries don't want to take a second in the financial markets it's that simple. why

should why should taxpayers bail out banks since when the taxpayers have to bail out mistakes made by banks that taxpayers didn't make those mistakes when i make a mistake i can i come to you and let you bail me out next time i start losing money all right dennis go ahead jump in well you should know u.s. government. no i absolutely agree with jim on this or in this instance why can't they allow them to go to go bankrupt we in virginia understand our rights as virginians compared to anybody else i think that you have the right if you are a country to opt out of that circumstance i think the germans have absolute the right to say we have given up we have watched this for a decade it has proven to be unworthy we are simply stopping the payment to the greeks we're going to stop payment to portugal they have to get their own act in order let them go greece will be far better off allow them to go back to the drachma make their economy stronger again let tourists move back go back to greece again we were talking about this beforehand it's too expensive to go and nobody is

there greek is a tourist spot and no tourists are there let them become a tourist but by going back to a devalued drive might tell you ok. i think you brought up a very interesting point i think we have to go with it still here is that if this president the same with greece then you have this knock on effect of this contagion and it is about banks here i mean we can all we can all criticize the banks but i mean the banking system in germany and france wants to survive this is well i mean it's damned if you do damned if you don't that's the problem absolutely right but let me share is even those are states that are you going to go bankrupt shares i'm going to. well the problem is that if you let them go bankrupt and if they default and this contagion spreads is probably going to skip over spain and hop right into . still grappling with it today then you've got a real problem this is not a domino effect in the eurozone this is a break for the rest of the world that's been thrown and is definite going to

affect our markets look the europeans can make up their minds hang on the europeans can make up their minds over a two day conference we took a eleven trillion dollars hit in the global capital markets for that and don't think we will get hit here if he gets it and it's too big to fail at this point and used. and you know you may have been going to years one of the time jeremy pointed as share it banks have been going bankrupt a hundred shares our banks have been going bankrupt for hundreds of years where we have made horrible mistakes over the past thirty or forty years in the united states we have made unbelievable mistakes in our financial situation so we've got to pay the piper a visually as dennis says when do you stop you're going to run this down for another five years of eventually the market's going to say you know they're you going to have a major crisis that you have to deal with at least if you have a crisis now you can organize it and let some people go bankrupt and by the way get as i wouldn't pull out of the euro if i were greece i'd just go bankrupt and

reorganize i think the euro is good for greece you know they reorganize the stop the craziness ok shares and if i can ask you. if you want to continue. no i just wanted to say you know clearly i think i agree. with jim that clearly greece's feature is within the eurozone but i'd like to ask jim and dennis both one other thing as americans if the u.s. government had not stepped in and then our one trillion dollar bailout where would you be right now you were so grateful that these guys stepped in because we were hemorrhaging the markets have frozen and everybody no. no no no no i was never a prayer of any of this bailout what are you talking about i would have let them all go bankrupt in two thousand and eight in two thousand it is outrageous what we're doing people who tried this such as the japanese have now have lost two decades the japanese refused to let anybody fail they have somebody banks zombie companies and twenty years later their stock market is down seventy five percent

this approach doesn't work americans already had one last decade we're going to have two or three at the rate they're going. to want to jump in there one of the things i'd like to ask everyone here is that all these governments are going through austerity i mean including the talons as we speak right now and but can austerity create growth guineas can you can you do you agree with that because i can't think of too many examples where our spirit is because if you want to pay back these loans you're not generating enough wealth i mean again it's a damned if you do damned if you don't approach we inside the eurozone austerity austerity doesn't create growth governments don't create growth low taxes getting government out of the way letting markets work that creates growth my favorite example of this is what happened in new zealand in the early one nine hundred eighty s. when they turned their back on everything that the i.m.f. it said they cut taxes across the board they did what they could to strengthen the new zealand dollar and the next thing you knew you were running budget surpluses

you have a trade surplus as they went the thought the proper way of allowing the market to freely function if we would do that we would get many of these problems simply subside. i don't go away so austerity i'm afraid is not the problem is not the problem it's a government is the problem getting in the way putting too many blocks in the way of people doing the things that in their own best interests serve everybody else ok what do you think about that germany's austerity list and why did you go ahead in the early and the early in the early one nine hundred ninety s. scandinavia had the same problem huge problems and in scandinavia a lot of people went bankrupt they reorganize they had a horrible two or three years but since then scandinavia has been one of the great growth region so the country sweden is probably better off than most nations you know as we speak in two thousand and one south korea had the problem at the end of the ninety's people went bankrupt they had horrible pain but since then they've had a booming economy the list goes on and on people who've taken the pain accepted

reality done something about it and then started over this idea of doing what the japanese did doesn't work doing what the americans have done doesn't work ok shares on their take everyone's talking about a selective default i mean is that just double speak for when it comes to a country like greece i mean i just don't want to call it default is this selective i mean is because it's not built into the euro zone you can't have it happen and so are they just trying to kind of fake it and say it's a default but it's not a default. you know we're very close to the line the bottom line is if a restructure will happen and it's going to happen you can call it a default if a restructuring actually does happen the credit agencies have a different view on this they believe if private participants are involved they will consider it a default want to just step back for one second you know austerity needs to happen in a lot of these countries obviously too much austerity will stifle growth has got to

be some balance or some some mechanism to grow down the road or there's no hope you know unfortunately both examples jim and dennis are giving are in the past in the eighty's in the ninety's when two thousand and eleven the financial markets have mutated we're in a very different environment right now we have a crisis of fear and fear has no economic logic to it and once it spreads it spreads like wildfire and everybody looks like greece portugal ireland spain italy now and the consequences are quite devastating we destroyed the american middle class wealth is going to join them here with a short break and we're back to watch back after a short break we'll continue our discussion of years of. you.

with the end of the boer war and the going away of the soviet union many people thought that nuclear weapons disappeared. the risk is not zero that something might be going off by mistake especially a lot of nuclear weapons on hair trigger a lot. of the victims could use it as a threat all as an actual event but you know if you keep spending a trillion dollars a year on weapons of eventually you're going to blow everybody up you've you know people are dying from these weapons but until we actually see if people don't wake up to nuclear weapons or a bill. that represents all of the firepower of the second world war this second sound is the equivalent firepower of the world's nuclear arsenal today.

we'll. bring you the latest in science and technology from around. the huge earth covered. and if. you want to. welcome back cross talk computable to remind you we're talking about the eurozone crisis. and if. it's. ok jim and i to go to you is the is it too expensive to lead three year old die or is it too expensive to keep it going. well first of all i should tell you i own the euro for

a variety of reasons but we'll come back to come back to that that in a minute i want to go to share point. for hundreds of years hundreds of years we've had bear markets and when you have a long period of excess somebody has to clean out that exist you cannot just keep going and going and going and going and pouring money down a rat hole the world doesn't work that way nothing wrong with a bear market bear markets have been going on for hundreds of years they clean out the excesses in the system and you start over it's usually like a forest fire when you have a forest fire it's terrible but it cleans up the underbrush it cleans out the deadwood and then the forest can grow even better the same way with where sessions the pressure depressions and and even the bear markets ok but it sure isn't but it's very interesting i mean the analogy of this one of the forest fire is nice but we're talking about people and governments and elected officials and this is where it gets really really sticky doesn't it ok if i was the baby are you going to have heat i don't want to pay for and i'm very happy with my situation right now ok sure

. the bottom line is you know a crisis is different than a bear market in a crisis you know it's like a victim that has just been hit by a bus and it's hemorrhaging through a major artery on the road what you want to do is stem the hemorrhaging and then decide then taken to hospital and then decide what you want to do but you've got to stem the hemorrhaging because in that hemorrhaging you lose your middle class if you lose your middle class you have decades and decades of pain ok did you see if you could see you want to jump in there go ahead. yeah i did want to jump in shares i brought up the idea that jim and i supported what happened in the united states and that's just not true jim and i may argue about one thing i think that what the united states government did in october of two thousand and eight when when the financial system really was about to seize up the central bank acted as central banks are supposed to do through history supply reserves in excess in order to accommodate that circumstance and get you past that two or three week or two month

period of time what we've done since then however by by continuously allying the central bank to expand its balance sheet and supporting that expansion of those monetary observes i take issue with that i think we needed to have stopped quite some time ago we did the right thing and in october two thousand and eight applying liquidity to the system but continuously doing it and supporting industries that probably shouldn't be supported by supporting businesses that probably should have been supported gets in the way of progress gets in the way of all allowing those businesses that really need that new capital that will be created to move forward so i take exemption we need to do the right thing at a at a that a period of time of panic but panic has ended panic as is done now you need to tell the greeks great stag i think it is panic attacks and i think this right is actually just beginning and it's coming back in with the fury right now shares and if i can ask you a question well no if we look at what's going on with italy and then we can look at spain and then it gets worse and worse and worse and it's perceptions it's

a very important shares and if i can ask you this monetary union it's monetary there's no fiscal side to it is that what's needs to be done to fix this because i think well maybe all of us would agree that you just can't keep pouring money into a system that doesn't structurally change it's not fixing the problem you're just dealing with the element of the of the moment and it's called fear. that's right and i think that what you've got you hit it on the head right here it's about perception the problem has been that the european leadership has been so bad that they have mangled the process for the last eighteen months clear decisive action would have calmed the markets a long time ago and we wouldn't be talking about second bailouts in ireland or in portugal and talking about financial crisis hitting italy at this point so the problem is there's no clear decisive action lot of domestic politics going on and when you have a union like this you can't behave like this that's that simple you invite disaster to your shores now you're right this is not a fiscal union but they are fiscal constraints when you join this union and i think

that they're now coming aware that the fiscal part of this is war critical than the monetary part at this point ok jim you want to look like you wonder if you're sure . i want to as peter and share as i want to as peter ensure as who's going to pay for all of this who's going to pay you know america's the largest debtor nation in the history of the world right now you know who's going to pay for europe to be bailed out all of the west who's going to pay for all of this are you sure are you peter the germans were the germans you can see the germans are getting. all the time so that brings up a very interesting point and looking at i mean at one point the germans are going to say enough is enough and i think everyone would feel that's justified that's the danger we have here. what are you sure it was down then it's going to. yeah it sure is a when you say decisive action what sort of decisive action should have been

undertaken decisive action on the part of government always frightens me what sort of decisive action would you have said would have been proper. it's a clear message to the clear message to the market that a fund has been created the bailout will happen the restructuring will happen everybody's aware that we cannot pay the money back instead of saying you know what one year from now they're going to go back in the private markets that was not going to happen even today the european central bank is not talking about restructuring they don't want private investors involved in this plan and the bottom line is everyone knows it has to go that way so the delay the confusion the different talking heads are not helping the situation and creating more confusion in the market when the market gets confused it starts to panic when you think about that jamie shares are everywhere you go everybody can jam jam. every one of the italy greece portugal spain and belgium arlan all of their debts are going up over the next few years none of those countries have declining debts are causing deficit

this is just getting worse it's not getting better and five years from now we're going to look at each other and say my god now the world is coming to an end because the debts are too staggering for anybody to deal with issues on one of the biggest problems that have been one of the biggest criticisms of the of the euro zone is that it doesn't really promote a lot of fiscal responsibility because you can there's moral hazard out there or you could just wait for the for the lifeboat to be you know to rescue you because you don't have to be responsible i mean is this something that needs to be changed where people are made of held accountable because like you said when the middle class is gone who's going to be paying taxes. look you're absolutely right you know they they believe that peer pressure and public pressure could keep these countries in line but it didn't work and i had bill and it was is presumptious that we thought it would work and this market failure the markets believe it could work and you know what what possessed the markets to believe that greek risk would be the

same as german risk so there was market failure here clearly now there are calls for for example the european central bank is calling for a european finance minister and the purpose of this finance minister is really not to represent all of the eurozone countries but to basically watch over the bailed out countries so it would be like a mini i.m.f. within the euro zone for conditions attached to countries that are bailed out and that's coming there's no question ok jim how much what that's what brought the one of the things the germans are saying for more bailouts we're looking at greece particularly the most the private sector has to get involved in this the i.m.f. is agreeing with that but there's not a lot of other there's not a lot of consensus across the eurozone on the how much should the private sector be involved in bailing out these governments i happen to agree with the private the private sector made the mistakes the private sectors made the loans to the greeks made the loans to all these people take your losses i mean you made the mistakes the taxpayers in finland austria didn't make the mistakes why should they have to

pay for all of this i mean this is this is terrible economics and it's horrible morality not that politicians care about morality that's for sure. if you think about that how much of the private sector i mean all in this i made a bad. well i made a bad trade yesterday and crude oil shares are would you help bail me out please oh no i think i'll go to the germans and ask them to bail you know i don't have a leader that is the same it's the same one you and i had a legal agreement if you and other married that i didn't hear us on that we're not sure is are you bring up an interesting way to do this this is a very different kind of leverage of the euro zone is ok go ahead jim go ahead hold on that's exactly what i meant hold on guys there is a little you know there was a legal agreement with the european union is called the mastery treaty you were supposed to keep your debts with your deficits under three percent you were supposed to run a sound too rich a contract a sound economy these guys violated the law they violated the treaty and now you

expect me to bail them out oh please are you going to let you know you're going to bail me out of here i have righted jersey the bottom line is you're absolutely right they're violated there's no question they violated the cheated on the books they did all sorts of things that were not kosher but here's the catch a legal contract was signed between the seventeen countries and now it's a catholic marriage they can get out of fit ok it's interesting i mean where you minute wait you know jim let me ask you a question here i mean again you know we focus on these national economies ok but really it's go back to really where it's the banks that want these bailouts they want they want governments to bail out these countries so they can pay banks money that oh them so it's really not about people is it it's about making sure banks can get their money back private individuals in many cases. peter maybe i haven't made so clear i would make the banks take their losses i would make them suffer they're the ones who made the mistakes that made you jim a debt with the great. wall street

was bailed out because everyone we were all told that we need a banking system so that we're getting the same thing go play now we the banking system much the rationale i'm not saying i agree with it. you said the operative words we were told yes you know who told us that the banks the banks who are panicking they called up and said save me save me save me come on let them i want to repeat banks have been going bankrupt for hundreds of years it's not the end of the world it may be a depression but you know if we let more people go bankrupt in one thousand in two thousand and eight we probably have it behind us by now other countries have it's been three years we would have had a horrible three years perhaps but you know when i in two thousand and eight out there in oklahoma and texas they were doing fine it was only on wall street that you had these staggering problems ok shares i'm going to give you the last word what's the future of the euro five years from now. five years from now i think you can have a two tier euro zone that has and the have nots ok then this what do you think

should be would you would you like to see it around in five years. i think it will disappear in five years i think cher's out his right i think there will be a northern fiscally responsible euro and i think in the southern states that have proven themselves to be fiscally irresponsible they will all go their own way and will be back to the eschewed oh well back to the drachma we'll be back to the era of all right let's see what the future holds for the euro many thanks to my guests a day in virginia washington and in singapore and thanks to our viewers for watching us here r.t. see you next time and remember of cross talk radio's. steve.

in india. the move to joint the hotel rooms. the gateway hotel the grand imperial truly the torch was the. most delicious

see don't need to go and. read this in the kennel was a photo retreat. over thirty countries including the u.s. officially recognized the libyan rebel council as the legitimate governing authority. earlier calls for gadhafi and his family to give up power. as the economic crisis deepens in europe with italy being at the latest country to adopt an austerity budget in the u.s. lawmakers are running out of time and to deal with its mounting debt. and as the u.k. phone hacking scandal puts the future of the murdoch media empire at risk questions arise as to why it's taken so long for action to be taken despite police knowing about many of the allegations for years.

and live from moscow where it is two o'clock in the morning this is are certainly glad to have you with us let's take a look at your top stories the u.s. along with more than thirty other nations has decided to recognize that libya's rebels as the true government of the country the libyan contact group convening in turkey also said gadhafi regime is no longer legitimate and urged the colonel to give up power granted to it you can has more commentary from our washington bureau . hillary clinton has announced washington now accepts the transitional national council as a legitimate government governing authority of the libyan people and diplomatic recognition of the council means that the u.s. will be able to fund the opposition with some of the more than thirty billion dollars in khadafi regime assets that are frozen in american banks but it's not only that the obama administration has provided overwhelming military and political support for this transitional council the head of the council has recently traveled

to washington showed his gratitude asked for more support analysts say it's no surprise that he's being propelled to power and leave the by washington. has studied in the u.s. for years he has talked to the u.s. so he's quite well connected with the united states but how often comes with strings attached and some say the leader an opposition leader is sure to get instructions from washington on how to return the favor so to say but some experts also point out that in an attempt to propane certain people to apply where the west supports the rebels and the rebels are not a homogenous group there are all kinds of people there are some radical elements as well of former jihadist who we now see his. two thousand says he estimates one thousand he had his or among the rebels in libya one lead didn't rebel commander has openly admitted his fighters have to leave and even a u.s. military study three years ago said made up the second largest group of jihadist seen in the world right after saudi arabia so i don't say the support for this very diverse.